Tag Archives: Mining

Key takeaways: Fiona Perrott-Humphrey ‘in conversation’ with Sir Mick Davis, Jhb Mining Indaba (online) 8th Oct 2020

Mining majors must convince investors of need to replace value – Sir Mick Davis

When asked about what he thought the major miners had done well or badly during the seven years that he had been on the sidelines of the industry following the Xstrata merger with Glencore, Sir Mick said:

  • Some good progress had been made in reducing costs and restoring balance sheets post the excessive capital spend binge that had occurred mid-decade and destroyed considerable shareholder value.
  • Now, however, there is a danger of the miners and investors being too focused on short- term cash returns, whereas natural resources companies need to be investing constantly to replace the reserves they dig out of the ground.
  • One of the biggest challenges was finding investors who truly understood the cyclicality of the industry,  and emphasising that it cannot be seen as a quasi-annuity.
  • One of the ways to start investing in growth again would be to partner with junior explorers and developers, to share geographic risk and to tap the entrepreneurial spirit that is in danger of being wiped out in the very large, very centralised majors.
  • Another challenge facing the industry is persuading bright young people to follow a career in the mining sector when it gets such bad press on ESG issues. The sector does a very poor job of portraying its strengths and explaining that the metals and minerals that it mines and beneficiates are used in improving the lives of people across the globe. In particular, there is a compelling story to be told around those commodities whose characteristics may enable them to be used in working towards a “greener economy” (e.g. batteries in electric vehicles and developments around a hydrogen economy).
Environmental under-investment comes back to bite – Sir Mick Davis

Africa Mining Summit (AMS2020)

On 16 September 2020, Fiona Perrot-Humphrey chaired a panel on Financing Mining Projects in Africa at the Africa Mining Summit 2020.

The session explored:
What makes a project financeable in Africa today? What are the roles of Private Equity, Public Listing, Banking and Development Institutions to stimulate investment? What commodities and/or project types are likely deemed most attractive in 2020 and the next decade? What other factors are financiers considering as part of the investment decision? 

  • How is the seismic wave of ESG affecting mining finance in Africa?
  • Can some commodities be of such special interest to investors that they override political risk perceptions?
  • Is Africa looking more heavily to China for funding, or is there a resurgence of interest from the Western nations?
  • The range of financing instruments available, and their relevance in different jurisdictions/ commodities?